Stock Market Update

[BRIEFING.COM] The stock market is mixed at midday with the S&P 500 (-0.1%) holding a modest loss while the Nasdaq (+0.5%) outperforms after a shaky first half of the Wednesday session.

Once again, the market faced some early pressure as continued weakness in Treasuries weighed on sentiment. Early selling paced by longer tenors lifted the 30-yr yield back toward its high from Monday (5.037%) after a night that also saw selling in Japanese debt and the release of stubborn April inflation figures from the U.K. Treasury yields remain near their highest levels of the day with the 10-yr yield up six basis points at 4.54% while the 30-yr yield is up five basis points at 5.02%.

The rise in yields comes as the House of Representatives prepares to vote on the reconciliation bill, which is expected to include an increased SALT deduction (to $40,000 from $10,000) and will no longer call for larger cuts to Medicaid.

Nine sectors display midday losses with health care (-1.3%) lagging amid renewed selling in UnitedHealth (UNH 307.17, -14.41, -4.5%) after The Guardian reported that the company paid nursing homes to reduce transfers between hospitals. The company responded by saying the Department of Justice did not pursue the matter despite engaging in a multi-year investigation. In addition, HSBC downgraded the stock to Reduce from Hold with a $270 target.

Elsewhere, the consumer discretionary sector (-0.4%) has narrowed its underperformance gap to the broader market after facing early pressure in the wake of underwhelming earnings results from a major retailer and a few apparel names.

Target (TGT 94.02, -4.10, -4.2%) missed Q1 expectations and lowered its sales guidance for the year, VF Corp (VFC 12.70, -1.73, -11.9%) beat Q4 EPS expectations on below-consensus revenue, and TJX (TJX 131.85, -3.08, -2.3%) reported a slight Q1 EPS beat coupled with below-consensus EPS guidance for Q2.

Only two sectors trade higher at midday, but that includes top-weighted technology (+0.5%) and the communication services sector (+2.0%). Alphabet (GOOG 172.89, +7.57, +4.6%) is contributing to the strength in communication services while tech stocks are rising with some leadership from chipmakers. The PHLX Semiconductor Index (+1.2%) is returning into positive territory for the year, masking a plunge in Wolfspeed (WOLF 1.14, -1.99, -63.6%) prompted by news that the company plans to file for bankruptcy.

Today's economic data was limited to the weekly MBA Mortgage Index, which fell 5.1% to follow last week's 1.1% increase as the Purchase Index fell 5.2% while the Refinance Index decreased 5.0%.